Investment Returns By Asset Class – February 2013 Update

trailing1302

Here is my monthly update of the trailing total returns for the major asset classes that I find useful. Passive ETFs are used to represent major asset classes, as they represent actual investments that folks can buy and sell. Return data was taken after market close at the end of January 2013.

Asset Class
Representative ETF
Benchmark Index
1-Mo 1-Year 5-Year 10-Year
Broad US Stock Market
Vanguard Total Stock Market (VTI)
MSCI US Broad Market Index
5.49% 16.85% 4.69% 8.79%
Broad International Stock Market
Vanguard Total International Stock (VXUS)
MSCI All Country World ex USA Investable Market Index
3.35% 13.83% -0.63% 10.20%
Emerging Markets
Vanguard Emerging Markets ETF (VWO)
FTSE Emerging Index
0.61% 7.61% 1.61% 16.36%
REIT (Real Estate)
Vanguard REIT ETF (VNQ)
MSCI US REIT Index
3.72% 14.64% 6.92% 12.40%
Broad US Bond Market
Vanguard Total Bond Market ETF (BND)
Barclays U.S. Aggregate Float Adj. Bond Index
-0.64% 2.47% 5.39% 5.09%
US Treasury Bonds – Short-Term
iShares 1-3 Year Treasury Bond ETF (SHY)
Barclays U.S. 1-3 Year Treasury Bond Index
0.00% 0.19% 1.85% 2.61%
US Treasury Bonds – Long-Term
iShares 20+ Year Treasury Bond ETF (TLT)
Barclays U.S. 20+ Year Treasury Bond Index
-3.86% -0.47% 8.30% 7.36%
TIPS / Inflation-Linked Bonds
iShares TIPS Bond ETF (TIP)
Barclays U.S. TIPS Index
-0.68% 3.72% 5.91% n/a
Gold
SPDR Gold Shares (GLD)
Price of Gold Bullion
-0.01% -4.93% 12.04% n/a

Here is a chart of the 1-year trailing returns for the major asset classes above, which I use to help decide where to invest new funds and for rebalancing. Note that I do not necessarily invest in all the listed asset classes, see my personal portfolio for details.

February 2013 Trailing 1-year Returns

[Read more...]

$10,000 P2P LendingClub and Prosper Loan Portfolio Update – January 2013

1301_prosper_full

Here’s the last part of the monthly update for my Beat The Market Experiment, a set of three real-money portfolios started on November 1st, 2012. See also my $10,000 Benchmark and $10,000 Speculative portfolio updates for January 2013.

On 11/1/12, I deposited $10,000 split evenly between Prosper Lending and Lending Club, and went to work lending other people money and earning interest with an 8% target net return.

$5,000 LendingClub Loan Portfolio, January 2013 Update. (A little late on the update, although only about $9 in extra interest was accrued since 1/1.) Below is a screenshot of my LendingClub account as of 1/9/13. Keep in mind that I had loans before, but sold them all on the secondary market and started fresh for this tracking experiment.


(click to enlarge)

Since last month, I invested another $400 for a total of 191 active and issued loans. I used simple loan filters based on my LendingClub filters post as well as my Prosper filter research noted below, and haven’t spent any time looking through any individual loan descriptions. The portfolio is very young, but so far all loans are current (16 days past due is considered late).

LendingClub.com account value: $5,082.51 (includes principal, accrued interest, net of fees)
[Read more...]

$10,000 Beat-the-Benchmark Speculative Portfolio Update – January 2013

1301_tk_small

Here’s another piece of the monthly update for my Beat the Market Experiment, a set of three portfolios started on November 1st, 2012:

  1. $10,000 Passive Benchmark Portfolio that would serve as both a performance benchmark and an real-world, low-cost portfolio that would be easy to replicate and maintain for DIY investors.
  2. $10,000 Beat-the-Benchmark Speculative Portfolio that would simply represent the attempts of an “average guy” who is not a financial professional and gets his news from mainstream sources to get the best overall returns possible.
  3. $10,000 Consumer Loan Speculative Portfolio – Split evenly between LendingClub and Prosper, this portfolio is designed to test out the alternative investment of peer-to-peer loans. The goal is again to beat the benchmark by setting a target return of 8-10% net of defaults.

$10,000 Beat-the-Benchmark Speculative Portfolio as of January 1, 2013. Many people speculate with their money, buying and selling stocks now and then, but they rarely track their performance even though they may brag about their winners. Honest tracking is the primary reason for this “no-rules, just make money” account. I am using a TradeKing account for this portfolio as I’ve had an account with them for a while and am comfortable with their simple $4.95 trade structure and free tax-management gain/loss software. Here is a screenshot taken from my TradeKing home page as of market close 12/31/12:


(click to enlarge)

[Read more...]

$10,000 Benchmark Portfolio Update – January 2013

1301_tda_full

Time again for a Beat the Market Experiment monthly update, for the first of three portfolios started on November 1st, 2012:

  1. $10,000 Passive Benchmark Portfolio that would serve as both a performance benchmark and an real-world, low-cost portfolio that would be easy to replicate and maintain for DIY investors.
  2. $10,000 Beat-the-Benchmark Speculative Portfolio that would simply represent the attempts of an “average guy” who is not a financial professional and gets his news from mainstream sources to get the best overall returns possible.
  3. $10,000 Consumer Loan Speculative Portfolio – Split evenly between LendingClub and Prosper, this portfolio is designed to test out the alternative investment of peer-to-peer loans. The goal is again to beat the benchmark by setting a target return of 8-10% net of defaults.

$10,000 Benchmark Portfolio as of January 1, 2013. I chose to open an account at TD Ameritrade due to their 100 commission-free ETF program, including the best low-cost, index ETFs from Vanguard and iShares. I funded it with $10,000 and bought all the ETFs required to be fully invested on 11/1/12. All trades were commission-free. My target asset allocation is below.

Due to simplicity and small portfolio size, for now I am going with 100% stocks and no bonds. This is meant to be appropriate for young investors, who should try to get a long horizon for stocks and can add more bonds later on. According to popular glide paths, a rule-of-thumb is having your age minus 20% in bonds. Here are the ETF components that represent each asset class:
[Read more...]

Investment Returns By Asset Class – 2012 Annual Returns, Year-End Update

1212_trailing

Happy New Year! 2012 has come to an end, which makes this monthly update into an annual wrap-up of the trailing total returns for selected asset classes. Passive ETFs are used to represent major asset classes, as they represent actual investments that folks can buy and sell. Return data was taken after market close at the end of December 2012.

Asset Class
Representative ETF
Benchmark Index
1-Mo 1-Year 5-Year 10-Year
Broad US Stock Market
Vanguard Total Stock Market (VTI)
MSCI US Broad Market Index
1.23% 16.41% 2.29% 7.94%
Broad International Stock Market
Vanguard Total International Stock (VXUS)
MSCI All Country World ex USA Investable Market Index
4.19% 18.23% -3.03% 9.41%
Emerging Markets
Vanguard Emerging Markets ETF (VWO)
MSCI Emerging Markets Index
5.88% 18.84% -0.87% 16.20%
REIT (Real Estate)
Vanguard REIT ETF (VNQ)
MSCI US REIT Index
3.72% 17.67% 6.07% 11.68%
Broad US Bond Market
Vanguard Total Bond Market ETF (BND)
Barclays U.S. Aggregate Float Adj. Bond Index
-0.21% 4.04% 5.89% 5.17%
US Treasury Bonds – Short-Term
iShares 1-3 Year Treasury Bond ETF (SHY)
Barclays U.S. 1-3 Year Treasury Bond Index
0.02% 0.31% 2.20% 2.61%
US Treasury Bonds – Long-Term
iShares 20+ Year Treasury Bond ETF (TLT)
Barclays U.S. 20+ Year Treasury Bond Index
-2.16% 3.25% 9.60% 7.75%
TIPS / Inflation-Linked Bonds
iShares TIPS Bond ETF (TIP)
Barclays U.S. TIPS Index
-0.64% 6.80% 6.89% n/a
Gold
SPDR Gold Shares (GLD)
Price of Gold Bullion
-2.43% 6.60% 14.46% n/a

Here is a chart of the 1-year trailing returns for the major asset classes above (also 2012 total annual returns), which I use to help decide where to invest new funds and for rebalancing. Note that I do not necessarily invest in all the listed asset classes, see my personal portfolio for details.

2012 Total Annual Returns

Every single asset class ended up in the green, with equities overall having a very strong year despite lots of continued uncertainty. I haven’t bothered to look, but I remember most forecasts from this time last year predicting a “sideways” market. I see 2012 as another year where it was helpful to ignore all the short-term predictions and instead focus on long-term returns.

[Read more...]

P2P LendingClub and Prosper Loan Portfolio Update – December 2012

1212_prosper2

As the last part of my ongoing Beat The Market Experiment, here’s the December 2012 update for my consumer loan portfolio. See also my $10,000 Benchmark and $10,000 Play portfolio updates for December 2012.

On 11/1/12, I deposited $10,000 split evenly between Prosper Lending and Lending Club, and went to work lending other people money and earning interest. Here’s how I’m doing it:

  1. 8-10% target return, net of defaults and fees. Each site provides an estimated return based on the interest rate and expected delinquency rate, but I am also using specific filters to try and maximize my return. Overall, I would say my risk profile is moderate/conservative. If I can get an 8% net return over the next 3+ years in the current interest rate environment, I’ll view the portfolio as a success.
  2. Minimal time commitment. I’ve done the manual loan-picking thing, and I’m over it. 400 loans at $25 a pop would take forever. Both sites allow you to save customized loan filters and use an automated investment algorithm to pick a portfolio for you.
  3. Loan Filters. I’m constantly tinkering with the loan filters, but you can get a good idea of what I am using by reading this best Prosper filters post and this older LendingClub filter post. Nothing too fancy, just some broad filters based on historical inefficiencies that may or may not persist.
  4. Loan term lengths and reinvested interest. I thought about only buying loans with 3-year terms in order to have a clean ending timeframe to this experiment, but in reality that would leave a lot of cash at the end as many people pay off their loans early. Also, higher rates are found in 5-year loans. Given the ample liquidity I found in secondary market, if I wanted to end the experiment I could just sell all my loans and cash out. (In October, I sold all of my existing loans on the secondary Folio market in a matter of days, quite easy as long as you’re willing to sell at a discount.) This way I will reinvest any additional cash into new loans maximize return.

LendingClub Details
Below is a screenshot of my LendingClub account as of 12/3/12:
[Read more...]

$10,000 Play Portfolio Update – December 2012

1212_playportaa

As part of my Beat the Market Experiment, I started three portfolios on November 1st, 2012:

  1. $10,000 “Good Boy” Passive ETF Benchmark Portfolio that would serve as both a performance benchmark and an example portfolio that would be easy to build and maintain for DIY investors.
  2. $10,000 “Bad Boy” Beat-the-Benchmark Portfolio that would simply represent the attempts of an “average guy” who is not a financial professional and gets his news from mainstream sources to get the best overall returns possible.
  3. $10,000 Consumer Loan Portfolio – Split evenly between LendingClub and Prosper, this portfolio of peer-to-peer loans will have a target return of 8-10% net with the goal of beating the Benchmark portfolio over the long run.

This is the monthly update for $10,000 Play Portfolio as of December 1, 2012. I have to admit upfront that I haven’t devoted much time into this portfolio. I am no wannabe-Warren Buffett, as he would read the financial statements and 10-Ks of any company before buying in. Still, I am serious about trying to beat the market, as this is my own hard-earned money I’m using. I am using a TradeKing account for this portfolio, and here is a screenshot as of close 11/30:


(click to enlarge)

Here’s a pie chart of my holdings:

Details below:

[Read more...]

$10,000 Benchmark Portfolio Update – December 2012

bench_tickers

As part of my Beat the Market Experiment, I started three portfolios on November 1st, 2012:

  1. $10,000 “Good Boy” Passive ETF Benchmark Portfolio that would serve as both a performance benchmark and an example portfolio that would be easy to build and maintain for DIY investors.
  2. $10,000 “Bad Boy” Beat-the-Benchmark Portfolio that would simply represent the attempts of an “average guy” who is not a financial professional and gets his news from mainstream sources to get the best overall returns possible.
  3. $10,000 Consumer Loan Portfolio – Split evenly between LendingClub and Prosper, this portfolio of peer-to-peer loans will have a target return of 8-10% net with the goal of beating the Benchmark portfolio over the long run.

This is the monthly update for the $10,000 Benchmark Portfolio as of December 1, 2012. I opened an account at TD Ameritrade due to their 100 commission-free ETF program, including the best low-cost, index ETFs from Vanguard and iShares. I funded it with $10,000 and bought all the ETFs required to be fully invested on 11/1/12. Due to simplicity and small portfolio size, I am going with 100% stocks and no bonds. My target asset allocation is below.

Here are the ETF components that represent each asset class:

Here are my holdings and their market value as of the end of day 11/30/12 (full screenshot):

Here’s the asset allocation:

Total value of stocks: $9,982.21
Cash balance: $24.18
Total portfolio value: $10,006.39

Not too much to talk about this month, I bought everything in a matter of minutes with no commissions at all, and a month into the experiment our total return to date is a snoozefest 0.06%. The Play Portfolio update will be up tomorrow.

[Read more...]

Investment Returns By Asset Class – November 2012 Update

1211_trailing

Here is my monthly update of the trailing total returns for the major asset classes that I find useful. I am using passive ETFs to track asset classes, as they represent actual investments that anyone can buy and sell. Return data was taken after market close at the end of November 2012.

Asset Class
Representative ETF
Benchmark Index
1-Mo 1-Year 5-Year 10-Year
Broad US Stock Market
Vanguard Total Stock Market (VTI)
MSCI US Broad Market Index
0.75% 15.94% 1.92% 7.19%
Broad International Stock Market
Vanguard Total International Stock (VXUS)
MSCI All Country World ex USA Investable Market Index
1.84% 10.51% -4.26% 8.59%
Emerging Markets
Vanguard Emerging Markets ETF (VWO)
MSCI Emerging Markets Index
1.32% 8.53% -2.07% 15.16%
REIT (Real Estate)
Vanguard REIT ETF (VNQ)
MSCI US REIT Index
-0.37% 18.74% 4.20% 11.36%
Broad US Bond Market
Vanguard Total Bond Market ETF (BND)
Barclays U.S. Aggregate Float Adj. Bond Index
0.16% 4.99% 6.35% 5.39%
US Treasury Bonds – Short-Term
iShares 1-3 Year Treasury Bond ETF (SHY)
Barclays U.S. 1-3 Year Treasury Bond Index
0.07% 0.33% 2.25% 2.70%
US Treasury Bonds – Long-Term
iShares 20+ Year Treasury Bond ETF (TLT)
Barclays U.S. 20+ Year Treasury Bond Index
1.34% 9.13% 9.96% 8.45%
TIPS / Inflation-Linked Bonds
iShares TIPS Bond ETF (TIP)
Barclays U.S. TIPS Index
0.47% 7.56% 6.99% n/a
Gold
SPDR Gold Shares (GLD)
Price of Gold Bullion
0.37% -1.54% 16.63% n/a

Here is a chart of the 1-year trailing returns for the major asset classes above, which I use to help decide where to invest new funds and for rebalancing. Note that I do not necessarily invest in all the listed asset classes, see my personal portfolio for details.

[Read more...]

Recent Investment Returns By Asset Class – October 2012

1012_1yearret

Here is my monthly update of the trailing total returns for the major asset classes that I find useful. I am using passive ETFs to track asset classes, as they represent “real” investments that you can buy and sell. Return data was taken after market close at the end of October 2012.

Asset Class
Representative ETF
Benchmark Index
1-Mo 1-Year 5-Year 10-Year
Broad US Stock Market
Vanguard Total Stock Market (VTI)
MSCI US Broad Market Index
-1.75% 14.75% 1.57% 8.73%
Broad International Stock Market
Vanguard Total International Stock (VXUS)
MSCI All Country World ex USA Investable Market Index
0.56% 5.43% -5.49% 8.90%
Emerging Markets
Vanguard Emerging Markets ETF (VWO)
MSCI Emerging Markets Index
-0.41% 3.47% -3.94% 15.80%
REIT (Real Estate)
Vanguard REIT ETF (VNQ)
MSCI US REIT Index
-0.82% 14.72% 2.26% 11.89%
Broad US Bond Market
Vanguard Total Bond Market ETF (BND)
Barclays U.S. Aggregate Float Adj. Bond Index
0.11% 4.99% 6.35% 5.39%
US Treasury Bonds – Short-Term
iShares 1-3 Year Treasury Bond ETF (SHY)
Barclays U.S. 1-3 Year Treasury Bond Index
-0.06% 0.30% 2.58% 2.66%
US Treasury Bonds – Long-Term
iShares 20+ Year Treasury Bond ETF (TLT)
Barclays U.S. 20+ Year Treasury Bond Index
-0.12% 10.97% 10.82% 8.21%
TIPS / Inflation-Linked Bonds
iShares TIPS Bond ETF (TIP)
Barclays U.S. TIPS Index
0.83% 7.85% 7.72% n/a
Gold
SPDR Gold Shares (GLD)
Price of Gold Bullion
-3.25% -0.57% 16.38% n/a

Here is a chart of the 1-year trailing returns for the major asset classes above, which I use for rebalancing. Note that I do not necessarily invest in all the listed asset classes, see my personal portfolio for more details.

I’ve barely been investing for a decade, but this month I notice that all the 10-year returns look pretty good for all the asset classes. (The 2001 dot-com crash is now left out.) Is this why everyone seems to be pretty happy with the market right now? I wonder if the good times will last.

[Read more...]

Recent Investment Returns By Asset Class – September 2012

0912_1yearret

Here is my monthly update of the trailing total returns for the major asset classes that I find useful. I am using passive ETFs to track asset classes, as they represent “real” investments that you can buy and sell. See August 2012 asset class returns for additional background and comparison.

Asset Class
Representative ETF
Benchmark Index
1-Mo 1-Year 5-Year 10-Year
Broad US Stock Market
Vanguard Total Stock Market (VTI)
MSCI US Broad Market Index
2.58% 30.26% 1.57% 8.73%
Broad International Stock Market
Vanguard Total International Stock (VXUS)
MSCI All Country World ex USA Investable Market Index
1.93% 13.58% -4.52% 9.44%
Emerging Markets
Vanguard Emerging Markets ETF (VWO)
MSCI Emerging Markets Index
5.32% 17.74% -1.73 16.58
REIT (Real Estate)
Vanguard REIT ETF (VNQ)
MSCI US REIT Index
-1.84% 32.32% 2.68% 11.42%
Broad US Bond Market
Vanguard Total Bond Market ETF (BND)
Barclays U.S. Aggregate Float Adj. Bond Index
0.09% 5.00% 6.52% 5.31%
US Treasury Bonds – Short-Term
iShares 1-3 Year Treasury Bond ETF (SHY)
Barclays U.S. 1-3 Year Treasury Bond Index
0.02% 0.40% 2.69% 2.69%
US Treasury Bonds – Long-Term
iShares 20+ Year Treasury Bond ETF (TLT)
Barclays U.S. 20+ Year Treasury Bond Index
-2.32% 6.10% 11.19% 7.82%
TIPS / Inflation-Linked Bonds
iShares TIPS Bond ETF (TIP)
Barclays U.S. TIPS Index
0.50% 8.87% 7.79% n/a
Gold
SPDR Gold Shares (GLD)
Price of Gold Bullion
7.70% 9.20% 18.57% n/a

Here is a chart of the 1-year trailing returns for the major asset classes above, which I use for rebalancing. Note that I do not necessarily invest in all the listed asset classes, see my personal portfolio for more details.

Looks like nearly all asset classes are up from a year ago. Indeed, the US stock market is up over 30% from a year ago… find a guru or economist that predicted that! Over the past 10 years, the US stock market had an a 8.59% annualized return. The hyped “lost decade” looks a lot different once you simply move your timeframe a few years. The longer I invest, the less I pay attention to short-term market predictions from anyone.

[Read more...]

Recent Investment Returns By Asset Class – August 2012

0812_1yearret

Now that our portfolio size has become more significant, I want to keep on top of things better while still avoiding most of the market noise. I took some ideas from how others share investment return data (see here and my 2011 year-end returns post) and will try each month to update the trailing total returns for the major asset classes that I find useful. I am using passive ETFs to track asset classes, as they represent “real” investments that you can buy and sell.

Asset Class
Representative ETF
Benchmark Index
1-Mo 1-Year 5-Year 10-Year
Broad US Stock Market
Vanguard Total Stock Market (VTI)
MSCI US Broad Market Index
2.52% 17.13% 1.77% 7.31%
Broad International Stock Market
Vanguard Total International Stock (VXUS)
MSCI All Country World ex USA Investable Market Index
2.74% -2.25% -4.01% 7.80%
Emerging Markets
Vanguard Emerging Markets ETF (VWO)
MSCI Emerging Markets Index
0.45% -6.18% -0.73 14.68
REIT (Real Estate)
Vanguard REIT ETF (VNQ)
MSCI US REIT Index
-0.10% 20.04% 3.92% 11.22%
Broad US Bond Market
Vanguard Total Bond Market ETF (BND)
Barclays U.S. Aggregate Float Adj. Bond Index
0.10% 5.90% 6.66% 5.46%
US Treasury Bonds – Short-Term
iShares 1-3 Year Treasury Bond ETF (SHY)
Barclays U.S. 1-3 Year Treasury Bond Index
0.00% 0.28% 2.82% 2.77%
US Treasury Bonds – Long-Term
iShares 20+ Year Treasury Bond ETF (TLT)
Barclays U.S. 20+ Year Treasury Bond Index
-1.31% 22.02%% 11.78% 8.54%
TIPS / Inflation-Linked Bonds
iShares TIPS Bond ETF (TIP)
Barclays U.S. TIPS Index
-0.31% 8.10% 7.96% n/a
Gold
SPDR Gold Shares (GLD)
Price of Gold Bullion
4.94% -7.60% 19.81% n/a

In addition, for relative comparison, I’ll update a chart each month comparing the 1-year trailing returns of the major asset classes. This should be useful in determining which areas I should be rebalancing my asset allocation. Instead of performance-chasing, I’ll be buying more of the worst-performing asset classes. Note that I do not necessarily invest in all the listed asset classes, see my personal portfolio for more details.

Listed are total returns (includes dividends and interest) as calculated by Morningstar as of 8/31/12. All periods longer than one year are annualized. NAV returns are listed except in the case of GLD, as there is not a significant premium/discount to NAV for the other ETFs and the NAV returns match the equivalent Vanguard mutual fund returns. In certain cases, I am using the long-term returns of the equivalent Vanguard mutual funds as Vanguard ETFs are simply a different share class of the mutual funds, share the same underlying investments (VXUS/VTIAX, VWO/VEIEX, VNQ/VGLSX, BND/VBLTX).